As a student at St. Carthage Grammar School, a Catholic parochial school in Chicago, Gregory decided that he wanted to be a priest even though he was not Catholic (Roman Catholicism). He converted at age 11 and later attended Niles College (now St. Joseph's College Seminary) of Loyola University and Saint Mary of the Lake Seminary, both in the Chicago area. He was ordained a priest on May 9, 1973. In 1980 he earned a doctorate in sacred liturgy at the Pontifical Liturgical Institute (Sant'Anselmo) in Rome. He served as an associate pastor, seminary instructor, and assistant to John Cardinal Cody and Joseph Cardinal Bernardin. He was ordained auxiliary bishop of Chicago on December 13, 1982, and installed as bishop of Belleville, Illinois, on February 10, 1994.

As bishop, Gregory played an active role in the life of the Roman Catholic church in America. He wrote extensively on church issues, served on several church committees, and was vice president of the U.S. Conference of Catholic Bishops (1998–2001). He was elected to a three-year term as president of the conference on November 13, 2001. His greatest challenge as president was the sex abuse scandal then plaguing the church, a problem he had dealt with successfully as bishop. Having recognized the criminal nature of the sex abuse long before the scandal burst into public view, Gregory helped to define a policy that would protect children from abuse. He also strove to improve the religious life of African American Catholics. In December 2004 Gregory was appointed archbishop of Atlanta by Pope John Paul II (John Paul II).